TaxTMI 
TaxTMI 
2020 (7) TMI 139
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....rial Estate, 2nd Floor, Pallikaranai, Chennai 600 100. (hereinafter called the Applicant) is engaged in manufacturing and trading of high-quality Outdoor and Indoor LED Lights with Fittings. They are registered under GST with GSTIN 33AAECI1643Q1ZD. The applicant has sought Advance Ruling on: What is the applicable GST Tariff code and GST rate for the supply of patent-applied LED stem (long bulb) with fittings when both are manufactured in the applicant's factory and supplied as a single unit? Is it a composite supply or a mixed supply? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant is engaged in the design, manufacture and supply of LED Lights of various applications in wide range of sizes and voltage with Fixtures and fittings where the fixtures and Fittings are made up of Plastic, Aluminium, Steel or a combination thereof. The applicant has stated that they have developed a LED Stem (Long bulb) which has a 360-degree light output and at the same time sav....
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.... "Furniture; Bedding, Mattresses, Mattress Supports, Cushions And Similar stuffed furnishings: Lamps and Lighting Fitting,. Not Elsewhere specified or Included; Illuminated Signs, Illuminated Name-Plates and the like; Prefabricated Buildings". They have stated that the description reads as "Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included".; For a Lamp or lighting fittings to be classifiable under Chapter 94, it must not be specified or included elsewhere meaning that that the lamp or lighting fittings must not be covered by any other heading of any other Chapter which is consistent with Note 1(f) to Chapter 94 that excludes "lamps and lighting fittings of Chapter 85;" from its scope.; that the only plausible tariff item is 8539 of Chapter 85 - "Electrical Machinery And Equipment And Parts Thereof; Sound Recorders And Reproducers, Television Image And Sound Recorders And Reproducers, And Parts And Accessories Of Such Articles" of the First Schedule to the Customs Tariff Act, 1975.; that it is clear from the wordings of CTH 8539, that the same refers specifically and exclusively "electric filament or discharge l....
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....ding to the following provisios:" If the product is classified based on the specific heading read with Section and Chapter Notes, then the classification of the product has to be done under the said heading only; in the instant case being Chapter Heading 9405. Also, as per Rule 3(c) of the Rules of Interpretation, when goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. The applicant has stated that they intend to supply the "LED stem (long bulb) installed lighting fittings" developed by them. As this makes it as a LED lighting product, the applicant is of the view that it will merit classification under the Tariff heading 9405 attracting 12% GST as Chapter 94 is reserved for finished lights with fixtures; while LED stem (long bulb) alone will merit classification under Chapter 85 which deals with Electrical Components like the LED stem (long bulb) in conjunction with electrical machinery and parts thereof. Since they are going to sell the complete unit including fixture and light, they are of the view that it will be regarded as a single product having ....
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.... not able to fully satisfy the customer requirements. • the aim of starting a new company was to launch a new LED light with Fixtures and fittings which could overcome the problems of a conventional LED light which was able to produce only Lesser Light output (only 180-degree) and they have now invented a new LED stem (Long bulb) and after testing it for 6 months has applied for the patent of this product. • To suit the requirements of this invention, they have launched a full range of new garden lights and set up the full manufacturing facility and also invested in own moulds and dies for the manufacture of the LED lights with fixtures or fittings; that they intend to supply the full product to the consumers i.e. the New LED Stem (long bulb) along with its enclosures. As the full product is factory fitted, tested and certified, the consumers are saved from the hassle of buying the low-quality LED lights and fixtures separately. • They are dealing with the below type of products: A.LED Stem (Long bulb) used in the following products: I. LED Garden Lights: a. Optic Series; b. Olivia Series; ....
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..... Chapter/ Heading / Sub-heading / Tariff item Description of Goods 258. 9405 50 31 Kerosene pressure lantern 259. 9405 91 00, 9405 92 00 or 9405 99 00 Parts of kerosene pressure lanterns including gas mantles Schedule II - 6% SI.No. Chapter/ Heading / Sub-heading / Tariff item Description of Goods 205. 8539 LED lamps 225. 9405, 9405 50 31 Hurricane lanterns, Kerosene lamp/pressure lantern, petromax, glass chimney, and parts thereof 226. 9405 LED lights or fixtures including LED lamps 227. 9405 LED (light emitting diode) driver and MCPCB (Metal Core Printed Circuit Board) Schedule III - 9% SI. No. Chapter/ Heading/ Subheading/Tariff item Description of Goods 376B. 8539 Electrical lighting or signaling equipment (excluding articles of heading 8539), windscreen wipers, defrosters and demisters, of a kind used for cycles or motor vehicles 390.* 8539 Electrical Filament or discharge lamps including sealed beam lamp units and ultraviolet or infra-red lamps; arc lamps [other than LED lamps] 438A.* 9405 Lamps and lighting fittings including searchlights and spotlights and parts t....
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....s will squarely be applicable to the applicant, who manufactures both LED lamps and fittings. Therefore, the supply of LED lamps 8s fittings may be classified under HSN 9405 rather than 8539, taxable at 12% (6% SGST 8s 6% CGST) • The type of supply under which it could be classified can be composite supply as the fittings/fixtures are made mainly for being part of the Lamp. Both are naturally bundled and supplied in conjunction with each other in the ordinary course of business as required under Section 8 (a) of the TNGST Act 2017. The principal supply in this case is that of the supply of LED lamp and the fixture supplied is nothing but an ancillary supply. • Also the entry as per Notification No. II (2)/ CTR/532 (d-4)/2017 dated 29.06.2017 specifically mention "fixtures including LED lamps", which renders that both supplied together is naturally bundled and cannot be separated. Hence, it doesn't qualify for mixed supply. 6. The applicant is under the administrative control of Central Tax. The said jurisdictional authority was addressed to report if there are any pending proceedings in the applicant's case on the issues raised by the applicant ....
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.... is built into the fixtures of various designs. The product is ready to use on connecting to a light source and the buyer does not need to buy a LED bulb separately. In the instant case, the various models are of different designs meant for use in the outdoors such as gardens etc. The supply of such a product is a single supply and it is required classify the same. 8.1 In terms of explanation (iii) and (iv) to Notification No. 1/2017 - Central Tax (Rate) dt. 28-06-2017, tariff heading, sub-heading, heading and chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 and the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory' Notes of the First Schedule shall be applied for the interpretation and classification of goods. 8.2 In the case at hand the competing chapter headings are 8539 and 9405. The relevant chapter heading, section notes are examined as under: CTH 8539: 8539 ELECTRIC FILAMENT OR DISCHARGE LAMPS, INCLUDING SEALED BEAM LAMP UNITS AND ULTRA-VIOLET OR ....
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....let or infra red lamps . 8539.21 -- Tungsten halogen 8539. 22 -- Other, of a power not exceeding 200 W and for a voltage exceeding 100 V 8519.29 - - Other - Discharge lamps, other titan ultra-violet lamps 8539 31 -- Fluorescent, hot cathode : 8539 32 -- Mercury or sodium vapour lamps; metal halide lamps: 8539 39 -- Other - Ultra-violet or infra-red lamps; arc-lamps 8539.41 - - Arc-lamps 8539.49 - - Other 8539.50 - Light Emitting diode (LED) lamps 8539.90 - Parts Electric Light lamps consist of glass or quartz, containers, of various shapes, containing the necessary elements for converting electrical energy into light rays (including infra-red or ultra-violet rays) The heading covers all electric light lamps, whether or not specially designed for particular uses (including flashlight discharge lamps) The heading covers filament lamps, gas or vapour discharge lamps, arc-lamps and light-emitting diode (LED) lamps. .................................... (F) LIGHT-EMITTING DIODE (LED) LAMPS The light from these lamps is produce....
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.... Hurricane lanterns The chapter note states as follows: SECTION XX MISCELLANEOUS MANUFACTURED ARTICLES Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishing; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like; prefabricated building Notes : 1. This Chapter does not cover : (f) lamps and lighting fittings of Chapter 85; The relevant HSN Notes is as follows: (I) LAMPS AND LIGHTING FITTINGS, NOT ELSEWHERE SPECIFIED OR INCLUDED Lamps and lighting fittings of this group can be constituted of any material (excluding those materials described in Note 1 to Chapter 71) and use any source of light (candles, oil, petrol, paraffin (or kerosene), gas, acetylene, electricity, etc.), Electrical lamps and lighting fittings of this heading may be equipped with lamp-holders, switches, flex and plugs, transformers, etc., or, as in the "case of fluorescent strip fixtures, a starter or a ballast. This heading covers in particular : (1) lamps and lighting fittings normally used for the illumination of rooms, e g. ....